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The Photofy app is free but users pay anywhere from $0.99 to $2.99 for premium features. The company declined to disclose the number of users who have downloaded the app, but said millions of photos have been enhanced using the app.

The company’s first round of funding came from 11 investors, including James Goodmon Jr., son of Capitol Broadcasting Co. owner Jim Goodmon, Capitol Broadcasting and LaNasa himself. LaNasa and Goodmon are golfing buddies.

LaNasa and Flores met while working at CafePress, a California-based online retailer that makes customizable merchandise. LaNasa sold his last company, InvitationBox, to CafePress for $4.5 million.

Photofy will begin raising its next round of funding this month and plans to conclude it at the end of summer or early fall, LaNasa said.

Photofy operates out of Capitol Broadcasting’s American Underground incubator space in downtown Raleigh. The company has 10 employees who focus mainly on creating content and improving the app’s functionality.

Promoting brands

Charging for premium features is Photofy’s sole source of revenue, and it brings in nominal profits, LaNasa said. But he said the company hopes to use its overlays to help businesses promote themselves and their brands.

The company has done little marketing to date but will soon undertake a large campaign involving Facebook ads as well as partnerships with brands and celebrities. LaNasa and Flores said they might explore allowing users to print the finished products to use as greeting cards or other items.

The app’s content is generated by designers on staff, crowdsourcing and partnerships with graphic artists with well-known styles, including Gina Martin and Charlotte-based Denise Albright. The company licenses all its designs. Anyone can submit a design and the company pays for the ones it approves.

Albright licensed her designs to Photofy for two years and receives a percentage of the fee users pay to access her premium package. She said she also benefits from the app’s promotion of her brand through displaying her biography and a direct link to her website.

The design categories range from birthdays and advocacy to “talk like a pirate day,” and new overlays and stickers are added regularly. Inspirational quotations can be overlaid on photos and exported to be cover photos on Twitter and Facebook. Many elements are free of charge but others cost a few dollars. For $2.99, users can buy a package with more than 3,000 overlays and stickers including a camel asking what day it is (Hump-day).

Photofy offers phrases in Spanish, Chinese and Serbian, among other languages, and these packages cost $0.99 to use.

The enhanced photos can be exported to a number of social networks and programs but is not a social network itself.

“We want to be friends with Instagram, with Facebook,” said LaNasa.

Photofy faces competition from other apps that are also focusing on the enhancement of photographs, including photo collage app Pic Stitch and AfterLight, which offers silhouette shapes and letters to add to a photo.

Collegiate designs are popular and Photofy will unveil designs for 25 new schools next month.

Licensing concerns

One concern pervading licensing offices is the potential for users to attach logos and brands to unseemly photos. The branded overlays are only a fraction of Photofy’s gallery.

N.C. State University declined Photofy’s request to license for the time being, said Director of licensing Gregg Zarnstorff in an email. NCSU’s licensing office was concerned about their lack of oversight on customized content but said they might re-visit the idea after monitoring the app’s use.

Zarnstorff said the small percentage of users who might use the app to portray the university or its students in a poor light would offset any benefits, especially if a negative image went viral. The office also aims to prevent the logo from appearing as an endorsement which contributed to this decision.

“It's unfortunate that N.C. State, a university that is the alma mater of multiple team members at Photofy, is fearful of our app that is being built to empower students, alumni and faculty to showcase their school spirit,” LaNasa said. He said he hopes the school will reconsider.

Albright, the designer, said the vulnerability of people using her designs in unflattering ways exists in any arena and she doesn’t feel Photofy exposes her to any additional risk.

“I hope my designs will be used to embellish and commemorate moments so users will associate my artwork with exciting and momentous occasions,” she said.